S&P 500, Nasdaq extend rally as investors weigh ME de-escalation signals

NEW YORK: The benchmark S&P 500 and the tech-heavy Nasdaq added to recent gains on Wednesday, as investors turned their attention to a fresh batch of corporate earnings while taking stock of the latest developments in the Middle East.

Equities have found support this week on hopes that Washington and Tehran could return to the negotiating table to end the war, which has caused widespread disruption in global oil markets, reignited inflation concerns and muddied the interest-rate outlook.

The benchmark S&P 500 index is just shy of its first intraday peak since the conflict erupted and is on course to close at a record should current levels hold.

The resilience suggests that war-weary investors are ready to rotate into risk assets at the slightest indication of a de-escalation in the conflict.

“The markets don’t need a finished deal to rally. All they need is evidence that talks will happen,” said Shay Boloor, chief market strategist at Futurum Equities.

“They are willing to digest all of this overseas heartburn because AI is so real and the rate of change is so exponential that it’s too egregious to be on the sidelines and not participate.”

At 11:48 a.m. ET, the Dow Jones Industrial Average fell 189.47 points, or 0.39 percent, to 48,346.52. The S&P 500 gained 30.48 points, or 0.44 percent, to 6,997.86, while the Nasdaq Composite advanced 246.98 points, or 1.05 percent, to 23,886.07.

Bank of America shares rose 1.9 percent after the second-biggest US lender reported growth in first-quarter profit. Wall Street heavyweight Morgan Stanley climbed 4.4 percent after it also reported a jump in quarterly profit.

The S&P 500 financial index gained 0.6 percent.

Wall Street’s fear gauge, the CBOE volatility index, dropped 0.31 point to 18.06. The S&P 500 information technology index rose 1.5 percent, as a recent rally in software stocks continued.

Quantum computing stocks such as Rigetti Computing, D-Wave Quantum and Arqit Quantum added 11.8 percent, 15.9 percent and 18.8 percent, respectively.